Instacart Shopper Taxes in Maryland - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Maryland?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Maryland state levels. As an independent contractor, Instacart does not withhold taxes from your payments. This means you are responsible for paying all applicable taxes yourself.

Federal Taxes: You'll report your Instacart income on Schedule C (Profit or Loss from Business) as part of your Form 1040. Schedule C allows you to deduct business expenses (more on that below), reducing your taxable income. The net profit (income minus expenses) from Schedule C is then reported on your Form 1040.

Maryland State Taxes: Maryland has a graduated income tax system, meaning the tax rate increases as your income increases. You'll use Form 502 to calculate your Maryland income tax liability. Crucially, Maryland also has county (local) income tax. The rate varies depending on the county you reside in. You'll need to determine your county's tax rate and apply it to your taxable income. Therefore, you'll need to file both a state and potentially a local tax return.

Top Tax Write-offs for Instacart Shoppers

Keeping accurate records of your expenses is vital! Here are some common deductions Instacart shoppers in Maryland can take:

• Mileage: This is a big one! The IRS standard mileage rate for 2024 is 67 cents per mile for business use. Keep a detailed mileage log (date, destination, business purpose, miles driven). You can use apps to help with this.
• Hot Bags & Equipment: The cost of insulated bags, phone mounts, car chargers, and other equipment used specifically for Instacart shopping are deductible.
• Smartphone & Data Plan (Partial): If you use your smartphone and data plan for Instacart, you can deduct the percentage of the cost attributable to business use. For example, if you use your phone 75% for Instacart, you can deduct 75% of your monthly bill.
• Software & Apps: Costs for any apps or software used to manage your Instacart business (e.g., mileage trackers, expense trackers) are deductible.

The 15.3% Self-Employment Tax Surprise

Because you're an independent contractor, you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This is called self-employment tax. You'll calculate this on Schedule SE (Self-Employment Tax). The combined rate is 15.3% (12.4% for Social Security and 2.9% for Medicare) on earnings over $400. Don't panic when you see this number – it's essentially the equivalent of what an employer would pay on your behalf if you were an employee. You do get to deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which helps reduce your overall tax liability.

Closing Tip for Maryland Residents

Tax laws can be complex, and this is a general guide. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software or working with a qualified tax professional (like myself!) to ensure you're taking all the deductions you're entitled to and complying with both federal and Maryland state tax regulations. Don't wait until the last minute – proactive tax planning can save you time, money, and stress. Good luck with your Instacart business and happy filing!